Secrets of the salesmen

We've asked our panel of anonymous car salesmen to share all the secrets that'll help you get the best deal on your next car. Read on to find out what they said

For some people buying a car is a pleasure, for others it’s stressful and something they’d rather put off.

There’s the worry that they might not know enough to get a good deal, or they might get ripped off by the salespeople at the dealership.

Should you go in hard when you negotiate – do salesmen respect that more?

Is being friendly the best way to get the salesmen on side, or will they think you’re a pushover?

We’ve teamed up with a panel of car salesmen to find out all the secrets the dealers don’t want you to know – so you can get the best deal next time you buy a vehicle.

Who’s our panel?

Our panel – who have chosen to remain anonymous – have worked in car sales for many years. Between them they have 60 years’ experience in the industry, selling both new and used cars. They’ve worked at main dealers such as Audi, BMW, Mercedes-Benz, Aston-Martin, and Porsche, as well as at independent garages.

They’ve shared a whole host of hints and tips that’ll help you feel knowledgeable and confident next time you’re looking to buy a car.

Before you visit

Before you head to the dealer, do your research. There’s a lot of quality information available online to help with choosing a car and dealership (although there’s also a lot that’s unreliable, so make sure you use reputable websites).

Look at the manufacturer’s website and that of the dealer too. See if the dealer is running any special offers that might work out better than the manufacturer’s set schemes. If you’re buying a used car, check your dealer’s competitors to see if they’re offering a better price.

Check out videos, articles and reviews, but try to not be led by one car journalist’s opinion. Find out what current owners think for an unbiased perspective of what the car is really like.

Being well informed (but not a know-it-all) when you go to the dealer is useful – it’ll help you lead the process and work with the salesman to get the best deal.

The best time to shop and buy a new car

The time of year you buy a new car can have a big impact on the deal you get.

Car manufacturers work to quarterly targets. If a dealer is close to hitting their target, they’ll be eager for more sales as reaching targets often means further bonus incentive payments from the manufacturer.

Dealers may be willing to take a small hit on the profit gained from a sale because the bonus payment is that much more. For this reason, the management of a dealership often allows salesmen extra discount so they can secure more sales towards the overall target.

All this means the last two weeks of each quarter (the last two weeks of March, June, September and December) could see you getting a better deal. And the last two weeks of a new registration month (March and September) are usually the very best option as dealerships often have campaign targets for new registrations.

Do car dealers earn commission?

The salesmen themselves also have targets which trigger larger commission payments. New car dealers will have sales targets, while used car dealers will get commission for things such as part exchange and the APR they offer. Always remember this when you are dealing with them.

Much of a salesperson’s earnings come from commission, and March and September are big earning opportunities. Not hitting their targets could have a big effect on how they much they get paid.

December is often a quieter month for car sales, so this might be the ideal time to get a good deal. Dealers still need to sell cars, after all, so they are more likely to try to attract people with offers and deals. As a member of our panel said: “Any deal is better than no deal at all.”

And within any given calendar month, the best time to buy is towards the end of the month. It’s at this time salespeople will be trying to make sure they hit their monthly targets.

Finally, you might want to consider purchasing a car when the model you want is being replaced by a new version. Although there may not be much difference between the old model and the new one, salespeople are often incentivised to sell the old model and may be able to offer bigger discounts.

Choosing a car dealership

The top recommendation from our panel is to do business with a dealership you’re comfortable with. You may want the cheapest deal, but you won’t want to put yourself through the hard sell – it’s unpleasant for everyone involved. You’ll want to feel like the salesperson is looking after your best interests, so it makes sense to go somewhere you’re happy.

The manager will have the most authority when it comes to giving you a discount. Try to deal with them if possible but bear in mind the available discount also depends on the type of car you’re buying – new or used.

If the car is new, the dealership will be working with the same margins as any other dealer. There’s only one pot of money available to play with so any ‘free’ features or discount come from the same place.

With a used car, it’s slightly different as the dealership decides the margin available. Of course, there’s a suggested retail price but ultimately, they can charge as little or as much as they want. This is why it pays to look around if you’re buying a used car.

Car finance and car insurance

When you’re planning a car purchase, you often have the option of taking out car finance and insurance at the dealership. But is this the best thing to do?

To find out more, we asked our panel if the dealer has any influence on the APR (annual percentage rate) of a car finance agreement. It turns out that, as new car sales can be so competitive, the finance APR is generally fixed at a lower rate as part of a subsidised deal from the manufacturer. And it’s common to be offered a deposit contribution from the manufacturer.

With used cars, the dealer will generally have a small amount of influence over the APR. They may have a list of rates they can offer and room for manoeuvre. As with the rest of the car buying process, make sure you do your research to find the best way to finance a used car and what your bank would offer you.

We also asked our panel if car finance customers get a better deal when buying a car – and interestingly, this was an area they disagreed on. One of our panel members said no outright while another told us deals are looked at on an individual basis, so they wouldn’t necessarily get a better deal due to buying on finance.

Yet another said yes, as the dealership receives finance commission. This could mean a slightly better deal on the overall price of the car or some accessories thrown in. But it isn’t necessarily going to be the best deal available to you, so once again, make sure you do your research.

Our panel also identified finance and insurance as two of the areas customers often understand the least. Not fully understanding or expecting the cost of insurance can be a potential block to some people when it comes to buying a car. And not everyone understands insurance groups and how they affect the cost of insurance. Shopping around for car insurance and finance is the best way to get a good deal. You can get pre-approved for a loan before you go shopping, so you know your budget beforehand.

One panel member explained customers sometimes don’t understand how the different types of finance agreement work, and how they can affect when they’ll be able to settle the finance early by part exchange without being left with negative equity. It’s so important to make sure you fully understand your finance agreement. We can help with that, both with our guides and the glossary at the end of this article.

How to be a good customer

Being a good customer when you’re buying a car is one way to try to make sure you get the best deal. Doing your research is important as ignorance doesn’t make a good impression. But on the other hand, neither does a know-it-all attitude.

If you think certain types of people might get a better deal than others, you’re wrong. The consensus is getting a better deal has nothing to do with personality traits, and instead just down to opening negotiations.

Our panel generally agreed they’d only negotiate if the customer asked. It’s definitely worth asking if there’s any movement on the price – your dealer won’t bring it up first!

And if you want to keep the salesmen on side, you should avoid their number one pet peeve: the time waster. The members of our panel agreed the most frustrating thing a customer can do is to go through the sales process after having several demonstrations before saying they need to think about it – despite having said at the beginning they wanted to buy that day.

Related to this is the customer who takes up the salesman’s time on multiple occasions – but isn’t brave enough to say they’ve found a better deal elsewhere when the salesman calls to follow up. Our panel agrees honesty is the best policy and they would rather know if you’re no longer interested.

And don’t be the person who asks their salesman to stay late so they could pick up their car after work and then didn’t turn up – as happened to one of our panel…

Who’s easiest to sell to?

We went on to ask our panel the kind of person they think is easiest to sell to. Interestingly, more than one answered with another salesperson! This is because other salespeople are usually decisive.

Otherwise, there are a couple of other types of people our panel agreed are easier to sell to. Firstly, anyone who has the motivation to buy – for example if you don’t have a car at all or are getting a new car for a job or similar.

Secondly, people who are aged 50 and over, with a high disposable income are often easier to sell to. They’ve generally spent a lot of time researching before going into the dealer, so making the sale generally just comes down to offering the most affordable deal with the best level customer service.

Who’s most difficult to sell to?

Our panel had a few kinds of people in mind when asked who’s hardest to sell to. They include:

Young first-time buyers with a parent, particularly if the parent is trying to prove a point

Those aged 20-35 who have a limited budget but want the top specification. They’ve usually done a lot of research and have five or six options in mind they want to test drive – and in the end they tend to be very indecisive

Someone buying commercial vehicles for a local council

People who are solely focused on what they can get for their part exchange rather than how much changing the car will cost them in the end – part exchange prices can differ from one dealership to another

How to negotiate a car deal

Our car dealers’ top tip for getting the best deal is to make friends with the salesperson, rather than eyeing them as someone who’s trying to rip you off. If the salesperson is on your side, they’ll be more likely to go out of their way to get you the best deal possible.

Don’t forget, they’ll be negotiating a deal with their manager on your behalf. Our panel explained that customers who were more hard-nosed or unfriendly were less likely to get the best deal.

You should always negotiate your discount before any added extras or freebies. What might be free to you comes at a cost to the salesperson, so the more you feel like you’re getting for free, the less discount you’re likely to get.

When we asked our panel who they might offer the best deals to, we got a variety of responses, from “the person or deal that’ll result in me hitting my target” to “a customer who you think you can form a relationship with for further visits for servicing” to “someone who would recommend you to family and friends”.

When it comes to negotiating car price, our panel outlined the following mistakes:

1. Not being honest with the dealer about your expectations

2. Not being honest about a deal received elsewhere, or overinflating the discount offered by another dealership

3. Giving up as soon as the salesperson says they can’t offer a discount

4. Being too honest and saying you “absolutely love” the car after a test drive!

Finally, we asked if repeat customers are more likely to get the best deal. This was another area our panel disagreed on – while one member of the panel said there’s no loyalty on either side, another said repeat customers sometimes get a better deal but always get better service. Yet another panel member said repeat customers or loyal service customers get better deals than walk-ins as they like to reward loyalty.

Car jargon buster

APR (annual percentage rate): The amount of interest you pay annually on a borrowed product like a loan or credit card.

Balloon payment: The final payment at the end of a personal contract purchase that allows you to buy and own the vehicle. Also known as the GMFV (Guaranteed Minimum Future Value) (see below).

Depreciation: Cars lose value over time, and this is known as depreciation.

F&I: This stands for finance and insurance, and covers paying for your car and any extra insurance products you might take out.

FSH (full service history): A fully stamped logbook, proof that a car has been serviced in line with the manufacturer’s schedule.

FDSH(full dealer service history): This is proof that a car has been serviced in line with the manufacturer’s schedule by a main branded dealer.

GAP (Guaranteed Asset Protection): This refers to GAP insurance. If your car is written off, your insurer’s pay out will be in line the market value. Due to depreciation, this often won’t be enough to cover your finance settlement. GAP insurance covers this shortfall so you’re not left out of pocket.

GMFV (Guaranteed Minimum Future Value): This is the proper term for the balloon payment (see above).

HP (hire purchase): Hire the car by paying an initial deposit, followed by fixed monthly payments, with an 'option to purchase' fee at the end of the contract in order to own the car.

MSRP (manufacturer's suggested retail price): Also known as the suggested retail price, this is the price the manufacturer recommends the retailer sells the vehicle for.

Part exchange: Also known as part ex or swapper. This is when you use your current car as part payment towards your new car.

PCP (personal contract purchase): Fixed monthly payments cover part of the value of a car, with an option to pay the remainder in a final payment to keep the car at the end of the contract (or you can hand it back). Mileage is pre-agreed.

PCH (personal contract hire): A long-term lease agreement where you make monthly payments and return the car at the end of the contract. Mileage is pre-agreed.

Residual value: The amount a car is worth after depreciation.

SIV (stand in value): The price a dealer paid for a used car. If the car was sold at this price, there would be no profit.

Admiral Group plc is registered in England and Wales at Tŷ Admiral, David Street, Cardiff. CF10 2EH (Reg No: 03849958). Admiral Financial Services Limited (Reg No: 10255225) is a subsidiary of Admiral Group plc and is authorised and regulated by the Financial Conduct Authority (Firm reference number: 771862). EUI Limited (Reg No: 02686904) is a subsidiary of Admiral Group plc and is authorised and regulated by the Financial Conduct Authority (Firm reference number: 309378). These details can be confirmed by visiting the Financial Services Register, www.fca.org.uk/register. EUI Limited acts for, and on behalf of, other regulated insurance companies. Further details may be provided on request.